Good morning, and Happy Easter. It's Sunday, April 5th, and in this week's edition, we're covering the return of stagflation talk and what it means for CRE margins, the IMF's reality check on rate cuts, and the story of an 84-year-old investor who owns $400M in real estate (and the lesson hiding inside his success).
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Stagflation talk is back - and this time, economists aren't dismissing it. Moody's Analytics puts the odds at 20-40%, driven by oil near $125 per barrel and tariffs acting as a supply-side shock. Urban Land Institute rounded up five leading economists to break down what this means for CRE.The concern isn't empty buildings - it's margin compression. CoStar projects retail rent growth at just 2% in 2026, industrial at 1.5%, and multifamily near 0.5%.
What it means for CRE: Lock in inflation-linked rent escalators, avoid over-leveraged refinances, and get selective on asset type. Well-located industrial, seniors housing, and self-storage - with its short lease terms and built-in rent flexibility - are the consensus safe harbors.
🔗 The Grave Dancer's Playbook: How Sam Zell Built a $39B Empire: Niko Ludwig breaks down the legendary career of Sam Zell, who made his fortune doing the exact opposite of the market. Zell bought distressed assets at 50 cents on the dollar during the 1974 crash and sold Equity Office to Blackstone for $39B at the absolute peak. Watch here
🔗 The Impending Commercial Real Estate Bloodbath: Grant Cardone sits down with Ken McElroy to discuss why we are only in the first innings of a massive market correction. McElroy explains why LPs and GPs will get wiped out first as trillions in CRE debt expires, and why he's targeting 1980s Class B properties to force appreciation. Watch here
🔗 The Spectacular Collapse of the Ghost Kitchen Industry: Tyler Cauble unpacks the cautionary tale of ghost kitchens, a trend that saw billions in funding before imploding. He breaks down the fundamental flaw—restaurants on 10% margins can't survive 30% delivery app fees. Watch here
The IMF just delivered a reality check to anyone still waiting on rate cuts - the fund expects just one reduction by year-end, with the Fed's benchmark settling at 3.25-3.5%. Inflation isn't projected to hit the 2% target until the first half of 2027, and with energy prices rising and tariff pass-through still working its way through the system, the IMF sees little room to move. GDP growth holds at 2.4% for 2026, but the message is clear: rates are staying higher for longer.
CRE Impact: With nearly $900 billion in CRE loans maturing in 2026, that debt doesn't restructure itself - monetary policy will need to create the conditions for it, and right now, the Fed's hands are tied.
Last week, I got a call from a legend.
I've heard about him from many people over the years - never met him, never talked. He's 84 years old and owns half the town here in Chicagoland.
Ninth grade education. Came to Illinois at 22, homeless. Millionaire by 25.
The way I got him on the phone? I sent him a letter - one of many in a direct mail campaign I ran to shopping center owners across Illinois.
He called me back. I could not believe it was him.
The man owns $400 million in real estate. Shopping centers, office buildings, hotels, apartments, car dealerships - 2 mln square feet across four states.
He's on the short list of most bankers here locally when they need help to sell any distressed building. When he makes an offer, it's almost always the lowest one in the room - and he gets the deal more often than not. How?
OG reputation. Cash. No contingencies. No appraisal. No phase one.
He looks at a property for ten minutes, offers 30-40% below asking, and writes the check on the spot.
I already knew about his buildings before the call. Word gets around. Immaculate condition. Typically 100% occupied. Tenants who've been there 30+ years.
He talked about deals that sound made up - cities handing him "dark" buildings for a dollar, agreeing to waive taxes for 20+ years, just to get him to take them. Because he gets them back to life and full in no time.
Now here is another side of the story. He has a plane he barely uses. A yacht he hasn't sat on in three years.
He's in the office at 6am. Home at 10pm. Every day. No weekends off in four years. At 84.
And then - almost as a side note - he mentioned he offered one of his kids a fully stabilized building. No debt. 100% full. $45,000 a week in cash flow.
Just take care of the buildings, take care of the tenants, and cash the checks.
The kid said no, he would rather sell it and take cash.
His accountant tells him regularly: sell everything, keep four buildings, you'll have $70,000 a week for the rest of your life.
Go live.
He can't. Everything is depreciated to zero. Selling triggers millions in taxes.
There is no one to hand it to. And there is no one who will run those buildings the way he does.
"You can't put the money in the casket," he said.
Then he laughed and told me about the next deal.
Here's what I've been sitting with since that call.
He achieved everything. By every external measure - this man won.
And yet the destination he arrived at looks nothing like the one he imagined.
I don't say that to be grim. I say it because I think most of us in this business are quietly making the same assumption he did.
Get there first. Feel it later.
But the feeling doesn't come from arriving. It comes from feeling good, happy, and free - while you're on the way to the goal.
The goal as the final destination, sacrificing the life to get there - that's the trap.
I'm almost forty years behind this man. I'm grateful he shared this with me.
I'm going to try to meet him for coffee. If he'll have me. And if I learn more, I'll share it here.
But in the meantime - I'm genuinely curious:
What are you building towards in your career?
And does anything change in your perspective hearing this story?
Please share - I'd really like to hear.
LET ME HEAR IT
Until next Sunday.
Be well,
Saul
P.S. Missed my podcast with Pat Hiban? Here is the full episode.
Videos & podcasts: I publish them weekly. Subscribe on YouTube, Apple Podcast or Spotify.
Random Saul Fact: This Tuesday, Beaver Creek closed for the season. 72 degrees on the mountain. T-shirt weather at 11,000 feet. Not a bad way to close it out.
